Pitfalls and advantages of working notice

Working notice seems counter-intuitive but can be an attractive option under the right circumstances.Photo by
Daniel Schweinert

'Katherine, you are fired. But we still need you to work tomorrow, OK?"

Ostensibly ridiculous. Why would any employer want a person who was just fired to continue working? Well, let me explain.

The law requires employers to provide notice to dismissed employees who are fired without legal cause. Almost invariably, employers provide severance instead. Few know that employers also have the option of offering working notice. An employee given working notice is required to do just that - continue working through the notice period that the employer provides. For every day worked, the employee is entitled to one less day's financial compensation.

The pitfalls of having an employee continue working are obvious - workplace sabotage, breach of confidentiality, disparaging comments to their co-workers, lackluster performance and low morale, to name several. Working notice is especially ripe for disaster where the relationship is acrimonious and the employee bitter. Allowing an employee in a highly sensitive position to have continued access to confidential information, business secrets, or company property is obviously imprudent.

But, that said, working notice has its advantages.

- Working notice provides an employer more bang for its buck since it avoids a large lump-sum payout and still gets work performed for its money. This is particularly appropriate if the relationship ended amicably or the employee is not in a position to cause harm. Employers can take solace in the fact that employees on working notice remain subject to the same workplace policies and standards as others. Just because Katherine is being terminated does not mean that her employer must accept dismal performance or workplace misconduct while she works out her notice.

- Offering working notice can be an effective litigation strategy. Employees seeking damages for wrongful dismissal must mitigate their losses by seeking suitable alternative employment. By offering working notice, Katherine's employer has arguably offered her the perfect mitigation - what alternative employment could be more suitable than one's own job? Employees who reject working notice in hopes of a big payout may be sorely disappointed when their wrongful dismissal damages are eliminated or slashed for rejecting their employer's reasonable offer to mitigate. The Supreme Court of Canada came to just that conclusion in the Evans vs Teamsters decision.

- Providing working notice can avoid the draconian financial consequences of being on the hook for a terminated employee's long-term disability (LTD) benefits. Employees are generally entitled to a severance payment equivalent to the salary and benefits they would have received if they had continued working during the notice period. However, many insurance companies require employees to be actively employed to remain covered under their LTD policies. Since terminated employees can't remain on their employer's LTD plan, calamity results when an employee provided a cash payout becomes disabled during the notice period - Katherine would be entitled to LTD benefits but is no longer insured. This very situation recently played out when Canac Kitchens was ordered to pay an employee the equivalent of LTD benefits to the age of 65 after he developed cancer during the notice period.

Employers can avoid this risk by offering working notice, thereby securing the employee's continued LTD coverage. Working notice is especially prudent when an employer knows or suspects an employee to have health issues at the time of termination.

So while working notice is certainly not always recommended - and sometimes just plain reckless - it can be used strategically to stave off litigation and save money. Maybe putting up with Katherine for a few more months isn't so bad after all.

Howard Levitt is senior partner of Levitt LLP, employment and labour lawyers. He practises employment law in eight provinces and is author of The Law of Hiring in Canada.

Related Posts

Comments

We encourage all readers to share their views on our articles and blog posts. We are committed to maintaining a lively but civil forum for discussion, so we ask you to avoid personal attacks, and please keep your comments relevant and respectful. If you encounter a comment that is abusive, click the "X" in the upper right corner of the comment box to report spam or abuse. We are using Facebook commenting. Visit our FAQ page for more information.

Almost Done!

Postmedia wants to improve your reading experience as well as share the best deals and promotions from our advertisers with you. The information below will be used to optimize the content and make ads across the network more relevant to you. You can always change the information you share with us by editing your profile.

By clicking "Create Account", I hearby grant permission to Postmedia to use my account information to create my account.

I also accept and agree to be bound by Postmedia's Terms and Conditions with respect to my use of the Site and I have read and understand Postmedia's Privacy Statement. I consent to the collection, use, maintenance, and disclosure of my information in accordance with the Postmedia's Privacy Policy.

Postmedia wants to improve your reading experience as well as share the best deals and promotions from our advertisers with you. The information below will be used to optimize the content and make ads across the network more relevant to you. You can always change the information you share with us by editing your profile.

By clicking "Create Account", I hearby grant permission to Postmedia to use my account information to create my account.

I also accept and agree to be bound by Postmedia's Terms and Conditions with respect to my use of the Site and I have read and understand Postmedia's Privacy Statement. I consent to the collection, use, maintenance, and disclosure of my information in accordance with the Postmedia's Privacy Policy.